R699pm car business falls apart: report
The Satinsky Group – the company behind the “New car from R699 per month” deals – has “effectively pulled the plug” on the arrangement in its current form, according to a report by IOL consumer journalist, Wendy Knowler.
The deal offered by Satinsky saw the group act as a motor dealership, offering branded cars with finance underwritten by South African banks, while subsidising monthly repayments through an advertising contract with Hong Kong based Blue Lakes Trading & Promotions.
Through these arrangements, buyers could effectively drive new cars from as little as R699 per month, depending on the model and contract signed.
However, according communications sent to clients, this arrangement has now come to an end, as Satinsky has cut ties to Blue Lake, leaving thousands of angry motorists taking on the full monthly car repayments without the ad revenue.
“Following recent communication we confirm that after lengthy discussions with Blue Lakes Trading and Promotions, it is our opinion that the interest of Satinsky clients will best be served by dissolving the management agreement between ourselves and Blue Lakes Trading and Promotions.” Satinksy said.
In its place, the group is offering clients a new rewards programme involving “points and discount vouchers from a long and rapidly evolving list of retail partners”, meaning an end to direct financial gain from the arrangement.
On Wednesday, the company reportedly sent clients an SMS offering to arrange for their payment term for the cars to be extended in order to lower their monthly car repayments.
Distancing itself
In response to queries put through on behalf of consumers, Satinsky distanced itself from Blue Lake’s contractual responsibilities regarding payments, saying it was not responsible for that part of the contract.
“Blue Lakes Trading & Promotions is a separate company with no ties to our company. It is based in Hong Kong and is a trading, promotions & advertising company,” a spokesperson told IOL.
“The Satinsky Group of companies is not responsible for any payments to clients who purchased vehicles from ourselves.”
The group noted that, when customers purchase vehicles from its group of companies, they enter into two separate transactions – a vehicle finance agreement with the bank, in which they are responsible for the full monthly payment.
They then have the option to enter into a advertising agreement with a third party such as Blue Lakes Trading and Promotions in which they become service providers to the principal Blue Lakes Trading and Promotions.
“No contracts are changed unilaterally and advertising fees vary from time to time dependent on the campaign which is available,” the group said.
The Satinsky Group of companies consists of a number of divisions including Drive Car Sales and Just Group Africa.
The group could not be reached for further comment.
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